Practical Advice on Deposit Protection

Thai baht deposits at Bangkok Bank are protected under the Deposit Protection Agency Act – up to a maximum of 10 million baht per one depositor per financial institution until August 10, 2019.

What is Deposit Protection?

Deposit protection was established by the government to strengthen the financial system and protect depositors against the loss of their deposits with financial institutions, up to a certain amount of coverage. Depositors will be reimbursed within the stipulated period of time without having to wait for the financial liquidation process to finish.

Benefits for depositors: Deposits placed in insured financial institutions are automatically protected under this Act. Depositors shall neither have concerns in, nor take part in, any process pertinent to insured deposits when an insured financial institution’s license is revoked. Reimbursement shall be made within a certain period of time.

Any depositor under the Deposit Protection Agency Act, either Juristic or Individual, is eligible for protection. Bangkok Bank Company Limited is also subject to this Act.

Deposit Protection News and Updates

The Deposit Protection Institution Act took effect on August 11, 2008. Since then, the initial full-coverage protection limit of 100 million Baht per depositor per financial institution has been continuously reduced, to 50 million Baht on August 11, 2012 and to 15 million baht on August 11, 2016. From August 11, 2020, the Deposit Protection Agency will lower the deposit coverage limit to 1 million baht. To provide assurance to investors, the Deposit Protection Agency has continuously collaborated with Thai commercial banks to publicize information about the deposit protection limit and update the changes to depositors, so that they have ample time to make decisions.

Evaluation of Financial Institutions’ Strengths

Depositors are able to check the stability of financial institutions from their credit ratings, provided by well-known financial organizations. Financial institutions’ gross revenues and assets are publicly available on websites – for example, websites of any financial institutions, the Bank of Thailand (BOT), Thailand’s Securities and Exchange Commission (SEC), etc. Other important parameters that should be taken into consideration are satisfaction in providing services, liabilities and Rate of Return (ROR).

Managing risks

Depositors can distribute their deposits among different banks, which is one of the methods in which they can manage risk under the Deposit Protection Institution. However, if depositors are confident in the stability and health of their financial institutions and are satisfied with the level of service they receive, then they do not need to make such distributions.

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